The Research Of Financial Instability And The U.S. Subprime Crisis

As a handle "double-edged sword",assets securitization is no exception,which poses potential risks while injecting new life into market.Because of the subprime mortgage securitization excessive loss,management deficiencies,negligence of supervision,rating distortion,lead to the credit and the financial fragility of extreme, when the macro economic reversals,house prices falling,make each stakeholder into financial difficulties,the barrage of negative impact of market expectations,finally the subprime crisis erupted.Subprime crisis pushes the US economy into recession.And because of the deepening of global economic integration and the linkage effect of the world economy value chain,the crisis has already quickly spread from the US into the whole world.Global financial markets suffer significant damage,and stock indexes go down accordingly.The world economy has entered a slowdown period even a recession.Under the precondition of the clarity of financial crisis concept,on the basis of the knowledge of development history of financial crisis modeling and in-depth study of domestic and foreign experts on the analysis of subprime crisis,combined with financial instability hypothesis,by use of Minsky's model,taken positive impact-credit expansion and financial fragility emergence-financial distress and the outbreak of financial crisis as the main line,this paper presents a comprehensive analysis of the outbreak,root and development of US subprime crisis,explains crisis transmission mechanism from horizontal and vertical paths,and discusses the negative influences the crisis has on world economy.Chapter one is introduction,which summarizes the background of selected topic and research significance of this paper and expounds the basic framework of this paper. Chapter Two is literature review,in which the concept of financial crisis,the development history of financial crisis model,and the studies of domestic and foreign experts on subprime crisis are mainly introduced.Chapter Three is model introduction, which gives an overview of financial instability theory,and on that basis systematically summarizes Minsky's model.Then it briefly introduces US mortgage market,and explains what subprime crisis is.Chapter Four is analysis of subprime crisis,by use of Minsky's model,which explains the roots of the outbreak and development of subprime crisis,analyzes subprime crisis transmission paths from horizontal and vertical direction,and expounds the profound influences subprime crisis has on the world.And in Chapter Five,the analyses of previous paper are summarized and policy proposals on China's economic development are put forward.